Intro to Econ Week 8
Intro to Econ Week 8 Econ 201
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This 2 page Class Notes was uploaded by Katie Truppo on Saturday August 20, 2016. The Class Notes belongs to Econ 201 at University of Tennessee - Knoxville taught by Kenneth Baker in Fall 2015. Since its upload, it has received 4 views.
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Date Created: 08/20/16
Money I Functions of Money 1. Medium of Exchange Generally accepted as means of payment 2. Unit of Account Services as a yardstick by which the relative value of all goods and services can be measured 3. Store of Value Can be held and exchanged later for goods and services All 3 functions=“money" Supply of Money Liquidity: the ease of converting an asset into cash M1: The most narrow deﬁnition, the most liquid form Currency held outside of banks Checking accounts Travelors checks M2: Slightly more broad and inclusive but less liquid M2=M1 Savings accounts Small Time Deposits (CD accounts under 100,000) Retail Money Funds (RMF) M3: More broad still, more inclusive than M2 and less liquid Money II Federal Depository Institution (FDI's) 1. Accepts and maintains deposits 2. Makes loans Commercial Banks Bank of America, Suntrust, USAA
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